QDEF uses a quality factor “and an optimization process that seeks to maximize this factor, target a beta lower than the Parent Index (Northern Trust 1250) and improve on the Parent Index’s dividend yield,” according to FlexShares. The fund’s top-10 holdings are similar to what investors find with more established dividend ETFs and that group includes Exxon Mobil (NYSE: XOM), Pfizer (NYSE: PFE) and Chevron (NYSE: CVX).
Of course, income investors want to know why they should be motivated to trade in a tried-and-true dividend ETF for a new kid on the block. If QDEF’s Treasury-beating yield is not its top selling point, the ETFs returns should be. Over the past six months, the three largest U.S. dividend ETFs by assets are each up about 10%. QDEF is up 19.2% over the same time.
FlexShares Quality Dividend Defensive Index Fund
ETF Trends editorial team contributed to this post.